Caterpillar CEO 2006 compensation to rise 30%

(Crain's) -- Caterpillar Inc. CEO James Owens' salary and bonuses for 2006 increased 30.4% over last year in response to the Peoria construction equipment maker's record sales and income.

Mr. Owens is in line to receive compensation totaling $5.23 million, up from $4.01 million 2005. His base salary for 2006 rose 16.6% to $1.35 million from $1.15 million in 2005. Mr. Owens' performance bonus for 2005, which is paid in 2006, slipped to $1.38 million from $1.61 last year. But his long-term cash bonus, which is based on the company's performance over three years, swelled to $2.50 million from $1.37 million, according to the company's proxy filed with the U.S. Securities and Exchange Commission.

In its explanation of Mr. Owens' compensation levels in the company's proxy, Cat's compensation committee praised his stewardship of the company and ideas for future growth.

"We believe that the company's 2005 performance is a testament to the new strategic direction and individual goals set by Mr. Owens," said the committee, which is made up of six directors. "He has very clearly positioned the company for long-term growth and success."

Cat's revenue last year rose 20% over 2004 to $36.3 billion, while income surged by 40% to $2.85 billion, or $4.04 per share.

A resurgence in the construction and mining sectors has stoked demand for Cat equipment. The committee also credited Mr. Owens with aggressively expanding Cat's business to overseas markets, particularly in China where the company acquired stakes in equipment companies Shandong SEM Machinery Co. and Caterpillar Xuzhou Ltd.

Mr. Owens, 60, has been Cat's top executive and board chairman since 2004. Last fall, he rolled out Vision 2020, a plan to drive revenue to $50 billion a year by 2010.